P40 B lost to tax evasion

MANILA, Philippines (Tempo) – Tax fraud and other officials of the Bureau of Internal Revenue (BIR) disclosed yesterday that the government is losing up to P40 billion annually from various tax evasion schemes employed by unscrupulous taxpayers.

BIR Commissioner Kim S. Jacinto-Henares, however, said she could not give a rough estimate of the amount of the tax leakage, saying the bureau has not done a study or gathered statistics on the matter.

Henares admitted that the losses could be very big if the statistics of the National Economic Development Authority (NEDA) is used as a yardstick in determining revenue losses.

According to the NEDA, 43 percent of the country’s Gross Domestic Product (GDP) belonged in the underground economy or roughly about P3.4 billion of the estimated P8 trillion GDP for the year. Businesses in the underground economy are not registered with the BIR and therefore do not pay any tax.

Some of them are involved in the importation and distribution of smuggled goods that, according to studies, cause the government to lose up to P127 billion annually in Customs duties and taxes. (Jun Ramirez)